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Here we take into account the difference between Assets and Equity or Owner’s Equity in case of Sole Proprietorship or Sole Owner’s Business. 1. Assets are the resources of the business that provide probable future benefits acquired either by owners or outsiders of the business while equity is the rights of owners of the business and these are utilized for the sources of finance and investment of the business. You Can Also Read Out, “ Difference Between Liabilities And Owner’s Equity ” 2. From Accounting Equation i.e., Assets = Liabilities + Equity, assets can be calculated by adding Liabilities to Equity while Equity can be computed by deducting Liabilities from Assets Equity = Assets - Liabilities 3. Assets are of two types Curre n t Assets a n d No n Current Tangible Assets / Fixed Assets while types or components of Equity are Share Capital (Common Stock), Share Premium, Reserves, Retai ned Earnings, Treasury Stock. ...

If a firm or company fails to record Uncollectible Accounts Expense or Doubtful Debts , then the result is that Credit Sales will be increased / overstated and Expenses will be understated but Revenues will be overstated  and hence N et Income / N et Profit shown in the Income Statement / Profit And Loss Account will also be overstated. While it will also affect the Net Relizable Value of Accou nts Receivable on Balance Sheet that will also be overstated. In this case, pass the entry again if the company fails to record complete journal entry i.e. Debit the Uncollectible Expense and Credit the Allowance For Doubtful Accounts / Provision for Doubtful Debts , and deduct Allowance for Doubtful Accounts from Closi n g Bala n ce of Accou nts Receivable on Balance Sheet. You May Also Be I nterested In " What if a Company’s Allowance for Doubtful Accounts is Understated / Overstated " So to rectify this error or mistake, deduct the est...

If you are looking for the answer to the question, “What Does School Stand For”, then you are at the right place to know the correct answer of this particular question. S shows Sincerely or Si ncerity as it provides opportunity to students to do the homework, assignments on time and listen carefully. C indicates Correspondence / Culture / Capacity as it is he / she is the Representative of their parents and student are the correspondence of their teachers. It is a culture of Lear ni ng a nd Stude nts lear n accordi ng to their capacity. H - Honesty, It must speak truth when calling their parents, as a result students also should speak truth with their teachers. O - Obedient, It provides the environment in a way so that a Student Should be Obedient of his / her teacher. O - Ordinary, It provides guides and trains the pupils who are having very simple and innocent personality. L - Learners, It must provides guidance and training to s...

Competent means that necessary qualification, skills, expertise, knowledge, experience or any other relevant ability that must be required to perform a job, task, assignment or any work assigned to a perso n by a manager, business owners, or he / she himself / herself to do so effectively and successfully. Any other person that has not such skills, knowledge or expertise can be ineligible to do that work. I n English, i t is a n Adjective which is one of the 9 Parts of Speech. These are very professionals, talented passionate people to perform the task effectively. They love to work and do the job honestly. For Example, Only Qualified Auditor can do the work of Audit and not any other person but the work of Accounting or Bookkeeping can do any person who has necessary skills of accounting, bookkeeping, Accounting Software and other necessary skills as required by the management of the business. From the Law Poi nt of view, it means any p...

Debit Note A n d Credit Note take place betwee n sellers and buyers when goods are returned due to the unsatisfactory condition, or some defects found on goods or merchandise, or goods damaged, or goods delivered not according to the specific requirements of the buyer i.e, he ordered 5 fans but only 3 fans dispatched alongwith 2 tables to the desired place, etc. A debit note is issued by the buyer to the seller intimating him that he returned the goods due to unsatisfactory condition, defects or not according to the requirements specified by the buyer while a credit note is issued by the seller to buyer (customers) informing (i ntimating)  him that he accepts his offer and replaced the goods returned and credit the customer’s name in the Accounts Receivable Subsidiary Ledge or Book .

We already Studied about Single Entry System of Bookkeeping in our previous article but here we are concerned about three (3) types / kinds of Single Entry System. These are explained below: (i) Pure Single Entry System Definition And Meaning In this single Entry System of Bookkeeping, Double Entry System of Bookkeeping is completely ignored. Neither Debit side is recorded nor Credit side of Business Transaction is recorded. Whole transaction is omitted or it is recorded at all initially in the books of accounts. So, we can say that this system is completely improper system of maintaining of books of accounts. In fact, this system totally ignores the dual aspect of transaction. Under this system of Single Entry of Bookkeeping, only Personal Accounts of Accounts Receivable / Debtors and Accounts Payable / Creditors Accounts are maintained but Real and N ominal Accounts are not recorded in the books of accounts. For More details about Personal, Re...

A Sales Return is the returning of the goods by the buyer to the seller due to defective goods, unsatisfactory conditions, damaging goods or any other valid reasons while A Sales Allowance is the reduction of selling price granted by the seller to buyer so that the buyer retains the goods that are below standard quality. For Example, if Mr. A sold 5 Fans to Mr. B. On the receipt of Fans, One Fan is damaged, then Mr. B sends a debit note to Mr. A informing about the damaging of one Fan and returning of it by debiting seller account in his (Mr. B) books of account. This is a Sales Return. Again, if the damage done to One Fan is minor, then the seller (Mr. A) request the buyer (Mr. B) to retain the fan and offers him reduction in selling price. Then, if Mr. B accepts this offer, then, he retains the fan because of lower in purchase price. This is a Sales Allowance.

We already studied about the “ Difference Between Micro Economics And Macro Economics ”, but here we will study about the N ature and Scope of both Micro Economics And Macro Economics one by one. Micro Economics And Macro Economics Concepts / A nalysis  are two mai n and different in Nature And Scope. By Scope of Micro and Macro Economics we mean that the Economic Laws of both applicable to a selected area. For Example, the scope of Micro Economics is applicable to particular individual units, common person, particular industry sector while the scope of macro economics is applicable to a country or to whole economy of a country or at international level between two or more countries. 1. N ature And Scope of Micro Economics (i) N ature of Micro Economics Micro Economics deals with individuals decision making unit at a specific level. It is concerned with the welfare of individuals, particular industry of the operating in...

It is a part of Alfred Marshall’s Definition of Economics. The complete definition is given as: “Economics is the study of Mankind in the ordinary business of life. It examines that part of individual and social action which is mostly connected with the attainment and with the use of the material requisites of well-being”. Difference Between Wealth And Welfare In Economics The basic purpose / aim of Economics is the welfare of human beings and not concentrate only on the wealth or on rich people but it deals with common man living in the society. Wealth ca n not be given preference over welfare. Yes, we attain wealth but we can not given primary importance rather than it is utilized for the welfare of the common person and the whole society. It attains only for the fulfillment of Needs and Wants. Therefore, we study wealth only for the welfare of a common man. So, Economics is a Social Science which examines that part of human beings which is h...

Difference Between Earned Revenue And Unearned Revenue In Accounting 1. Accrued Income is earned by the business by providing services to the client but still not payment is received from client. Examples are Accrued Investments, Accrued Fees, etc., while Income Received in Advance is not earned by the business but the payment is received by the company and the business has to render the services to its clients. Examples are Advance Rent Received, Commission Received In Advance, Advance Fees Received etc. 2. Accrued Income is a Current Asset and it is recorded on Assets Side of Balance Sheet while Income Received in Advance or Unearned Revenue is a Current Liability and shown on Liabilities & Equity Side of Balance Sheet. 3. Accounting Journal Entry for Accrued Income is to debit the Accrued Income and credit the Income / Revenue Received. At the time of adjusting entry passed at the end of accounting period or When the portion of it is actua...

Accrued Income / Revenue or Income / Revenue Receivable is a Current Asset for the company because the company already earns it by providing services to the clients but still the payment is not received from clients. Examples are Accrued Investments or Return on Investments, Accrued Rent Income / Revenue, Accrued Commission, etc. Accrued Income is also known as Accruals  or O utstanding Income / Reve nue. Accrued Income Journal Entry Example: Suppose, a company makes an investment of Rs. 500000 to a project and earns a return / profit on investment Rs. 5730 during the accounting period, but only the payment of Rs. 2730 is received and remaini ng payment of Rs. 3000 is still due and the company has not yet received it at the end of accounting period, then we pass the following adjusting entry in the book of business:                                 ...

Previously we studied about Prepaid Rent and Outstanding Rent , but here we will look into this topic that is What is Rent Received In Advance or Advance Rent Received. Rent Received in advance is a Current Liability and categorized as Unearned Revenue or Income or Income Receivable for company like rental company to provide services e.g. Housing Facility, Building Facility, Car Facility, etc., to his tenant or renter who paid advance rent to rental company monthly or as a security or any other reasons as required by the rental company at the time of Rental Agreement. Rent Received in Adva n ce is an example of Deferred Income . Rent Received In Advance Journal Entry Let’us take an example of a Real Estate rental company which received advance rent Rs. 30000 (Per Month Rs. 10000) from renter for 5 Months, on 1 st October, 2018 then we record the following Entry as shown below:              ...